January 29, 2006
LEISURE AS A FACTOR OF PRODUCTION II
Nemo contra deum nisi deus ipse
(Second of a seven part, plus epilogue, series)
by the Sandwichman
All those gripes I talked about in part one are very well and good. But as I said, they miss the mark -- namely, the standard of nemo contra deum nisi deus ipse: “no one can stand against a god unless he is a god himself.” You can’t replace something with nothing. You can’t substitute a nullity for a theory.
Except, it seems, in economics.
S.J. Chapman's theory of the hours of labour (1909) was described in 1932 by Hicks as "[t]he classical statement of the theory of 'hours' in a free market..." Expounded in Chapman's article, "Hours of Labour" and restated in Pigou's Economics of Welfare, "[t]here is very little that needs to be added to the conclusions of these authorities."
Twenty-four years later, in "Hours of Work and Hours of Leisure," H. Gregg Lewis (1956) described "the theory of the demand for leisure viewed as a consumption good" (that is to say the butt-on-a-slide model) as the "orthodox approach."
So, how did this allegedly "orthodox approach" supplant the prior "classical statement"? You tell me.
According to Nyland (1989), Hicks introduced a "simplifying assumption" that the given working day be assumed to be optimal for production. The purpose of the simplification was to get around the difficulty of calculating the returns to the various factors of production posed by the fact that worktime has both a temporal and an intensive dimension. Anyone familiar with the Cambridge capital measurement controversy (see Cohen and Harcourt 2003) might recall that the ambiguous temporal/intensity character of labour is not the only obstacle to calculating the returns to capital, nor was it the one highlighted in the controversy.
To be sure, Hicks himself cautioned about the "very considerable dangers" of his simplifying assumption and the need to "think back our arguments into a more cumbrous but more realistic form as frequently as possible." But it would seem that when you introduce an assumption that is diametrically opposed to the more realistic one, it's not so easy to do the thinking back and "as frequently as possible" decomposes into never.
Next: The marginal utility of evasion.
Posted by sandwichman at January 29, 2006 10:15 AM